Date: September 2018
Location: Park Street, Sydney, Australia
Name: Park Regis Hotel
No. of Keys: 122
Seller: iProsperity Group, an Australian advisory for high-net-worth Asian investors.
Buyer: Yeh Hospitality Group, headed up by Johnson Yeh, which has a pipeline of four hotel developments set to open in Sydney’s CBD in the next five years. which includes the QVB Chambers on York Street, a warehouse conversion on Wilmot Street, one near Hyde Park and another near Barangaroo.
Mr Yeh, whose strategy is to focus on the mid-range hotel market, also owns the former Spanish Club at 88 Liverpool Street, Sydney.
The sale price represents a 23-percent increase on the original purchase price in less than two years.
The hotel takes up 10 floors of the 45-level mixed-use tower at 27 Park St, Sydney.
“We identified a clear strategic opportunity to buy the Park Regis in 2016,” said iPG Group CEO Michael Gu in a statement. “We predicted income would grow due to market dynamics. This prediction has been realised with favourable net income growth during our ownership.”
Recent refurbishments as well as increased sales and marketing efficiencies, stemming from StayWell Holdings management (Prince Hotels and Seibu Group), are set to underpin higher average rates at the Sydney hotel.
One of the largest hotel management groups in Asia Pacific, StayWell Holdings and its parent company Prince Hotels Inc., offers a diverse portfolio of properties across a combined network of 74 open and operating hotels worldwide.
Prince Hotels & Resorts and StayWell’s combined brand offerings include The Prince, Grand Prince Hotel, Policy, Park Regis, Prince Hotel, Leisure Inn Plus, Prince Smart Inn, and Leisure Inn.
Prince Hotels & Resorts and StayWell have set a strategic goal to deliver 250 hotels* in the medium to long term. The expansion of both company brands will take place across the regions of Australia, New Zealand, Southeast Asia, Asia, Japan, Taiwan, Oceania, the Middle East, Europe and the United States.
(*150 Prince and 100 StayWell)
Prince Hotels operate a combined network of 50 hotels, 31 golf courses and 9 ski resorts. StayWell has an existing network of 24 open and operating hotels and a further 15 hotels that are committed and opening over the next few years. In addition, StayWell has two key strategic partners being Manhatton Hotel Group in China (19 hotels) and Cristal Group in the Middle East (11 hotels).
In its recent Q1 2018 hotel market analysis report, iPG predicted that buoyancy in the hotel sector will continue for the remainder of the year, with Sydney to experience the highest activity levels and strongest ADRs.
In the report, Gu noted Australia received 8.3 million international tourists year-over-year as of March. “This upward trend is showing no sign of abating and is resulting in a hotel buying frenzy in the absence of development opportunities.”
The deal is expected to close on October 31, and positions iPG to continue its growth trajectory toward $10 billion in assets under management by 2020.
The sale was handled by Gus Moors and Karen Wales of Colliers International.
When the sale was first announced, Wales said in February Sydney’s hotel market has seen strong performance in recent months. “The city boasted an occupancy above 88 percent in 2017, with average rate growth of 7 percent year on year. This is the largest increase since Sydney hosted the Olympics in 2000,” she said.
Price per Key: AUS$442,623
THPT Comment: A good and full price. Surprised Staywell didn’t acquire this hotel.
First Seen: Hotel Management